Court rejects fuel rules

WASHINGTON  United Auto Workers Local 95 President Mike Sheridan was unsure this morning of the impact of a federal appeals court ruling Thursday that said fuel economy standards were too low, but he said he trusts that local lawmakers are fighting for the auto industry.

“I know that we have (Sen.) Russ Feingold fighting hard for us, as well as (Rep.) Paul Ryan, in a bipartisan approach,” he said.

Fuel economy standards on new pickups, minivans and SUVs were set too low by federal regulators and should be redone, a federal appeals court ruled in a move that builds momentum for tougher efficiency rules on cars and trucks.

If it stands, the ruling would sweep away many of the legal arguments Detroit automakers have used to fight previous increases in fuel economy standards.

It would force regulators to account for the benefits of reducing greenhouse gas emissions through more efficient vehicles. And it likely would require any new rules to treat many SUVs as cars instead of trucks, which automakers have long argued against in Congress and elsewhere.

Environmentalists and backers of tougher fuel economy standards in Congress hailed the decision.

The ruling “sends a clear and compelling message to the Bush administration that gone are the days of ignoring our environmental laws without consequences,” said Sen. John Kerry, D-Mass. “We need real steps to combat climate change, and getting serious about fuel economy is a great start.”

The ruling by a three-judge panel from the Ninth Circuit Court of Appeals in San Francisco came in a lawsuit filed by environmental groups, 11 states and two cities over a 2006 increase in fuel economy standards for trucks. The groups argued that the National Highway Traffic Safety Administration had broken federal law by requiring an increase of just 1.5 miles per gallon in Corporate Average Fuel Economy rules for trucks between the 2008 and 2011 model year, to 24 mpg.

NHTSA had prevailed in a lower court, but the panel found for the environmentalists and states in most of their claims.

The ruling “supports the groundswell in public and legal opinion that improving CAFE is one of the most important steps we can take to fight global warming and improve energy security,” said Pat Gallagher, director of environmental law for the Sierra Club.

While the judges ordered NHTSA to rework the rules for the earliest possible model year, the industry has mostly completed design work on many of the vehicles it covers. The Alliance of Automobile Manufacturers, the trade group that includes General Motors, Ford, Chrysler and Toyota, said automakers had relied on the rules in developing new models.

“Any further changes to the program would only delay the progress that manufacturers have made towards increasing fleet-wide fuel economy,” Alliance President Dave McCurdy said in a statement.

NHTSA declined to comment, and a Justice Department spokesman said the administration was reviewing the ruling and its options.

But NHTSA and the U.S. Environmental Protection Agency are already working on new fuel economy rules for vehicles in the 2012 model year and beyond, under orders from President Bush.

The agency typically has set fuel economy standards by balancing the cost of higher standards on automakers and consumers with the benefits in fuel savings. Despite pleas from environmental groups when it set the truck rules in 2006, NHTSA put no value on reduced carbon dioxide emissions linked to global warming, saying there was no consensus on how much a ton of carbon was worth.

But the appeals judges found that NHTSA should have put some value on carbon emissions, as it was able to put a cost on other hard-to-measure benefits. Environmentalists argued that the final standard would have been up to 25.5 mpg by 2011 had NHTSA used their cost estimates.

The agency “cannot put a thumb on the scale by undervaluing the benefits and overvaluing the costs of more stringent standards,” said Judge Betty Fletcher in the ruling.

Fletcher also wrote that NHTSA was wrong to leave the “SUV loophole” intact, and ordered NHTSA to either close it or provide a valid reason for keeping it.

Under the original fuel economy law in 1975, trucks were permitted to meet lower standards than cars because they were considered work vehicles.